BRAZIL AMERICAN CHAMBER OF COMMERCE Brazil: Investment Opportunities and International Arbitration

1. BRAZIL AMERICAN CHAMBER OF COMMERCE Brazil: Investment Opportunities and International Arbitration New York, April 15th, 2010 Fernando Eduardo Serec TozziniFreire Advogados R. Borges Lagoa ,1328 04038-904 - São Paulo, SP - Brazil Tel: (55 11) 5086-5230 Fax: (55 11) 5086-5555 E-mail: fserec@tozzinifreire.com.br

2. What an IPAD and Brazil have in common?

3. Both of them have new and great features - IPAD lLED-Backlit dDisplay Thin and Light Multi-Touch, Wireless, Connectivity

4. Both of them have new and great features - Brazil

5. But both still have their bugs and problemsIPAD • Do not have a USB port; • Weak Wi-Fi; • Charging Issues; • Typing headaches;

6. But both still have their bugs and problems - Brazil • Poor Education system; • Deficiencies in the Healthy system • Corruption; • Archaic Labor Legal System; • Crazy and Burdensome Tax System

7. But things are improving in Brazil…

8. Things are really improving in Brazil… “And, in some ways, Brazil outclasses the other BRICs. Unlike China, it is a democracy. Unlike India, it has no insurgents, no ethnic and religious conflicts nor hostile neighbors. Unlike Russia, it exports more than oil and arms, and treats foreign investors with respect.” and treats foreign investors with respect”.

9. Arbitration In Brazil • Approximately R$2,4 billion (US$ 1,200,000) were disputed in local arbitrations in Brazil last year. In 2008 the amount involved was R$ 867 million. Since 2005 when CBAR started to collect such information, the local arbitration centers and chambers have solved disputes involving almost R$ 5 billion. (Source: CBAR – “Comitê Brasileiro de Arbitragem”(Brazilian Arbitration Committee)

10. Good Legal Framework • The Arbitration Act 1996 (Federal Law Number has been in effect for almost 14 years, while the New York Convention on the Recognition and Enforcement of Foreign Awards was ratified in 2002.

11. Rules to be Adopted in an Arbitration • The Brazilian Arbitration Act grants the parties autonomy to select the legal rules to govern the arbitration proceeding, which may be conducted ad hoc or under the administration of any domestic or international arbitration institution. • Practice shows that in Brazil the vast majority of the arbitrations are institutional arbitrations.

12. Arbitration Institutions - Local • Throughout the last decade a significant number of arbitration institutions and centers have been created or gained reputable prestige in Brazil. • Arbitration and Mediation Centre of the Chamber of Commerce Brazil-Canada (CCBC); • the Sao Paulo Chamber for Mediation and Arbitration; • American Chamber of Commerce in Sao Paulo • FGV Chamber of Arbitration in Rio

13. Arbitration Institutions - International • Recognized importance of the well-known international entities such as: • International Court of Arbitration of the International Chamber of Commerce (ICC) • International Centre for Dispute Resolution (ICDR); • London Court of International Arbitration (LCIA).

14. Language • With the exception of the 2004 Public-Private Partnership Law and the 2005 Amendment to the Concessions Law, which authorize arbitration in disputes between public entities and private parties, but requires that the language of the arbitration should be the Portuguese language, arbitral proceedings may be conducted in any language.

15. Foreign and domestic awards • All awards issued within the Brazilian territory are considered to be domestic awards irrespective of whether the underlying dispute has an international flavor. According to the Brazilian Arbitration Act, the domestic arbitration award is enforced irrespective of its judicial recognition by the Brazilian courts

16. Enforceability of Foreign Awards in Brazil • The Brazilian Arbitration Act establishes that for an arbitration award to be recognized and enforced in Brazil, it shall only be subject to the confirmation proceeding before the STJ. • The application for confirmation should contain the original foreign arbitration award or a certified copy thereof, duly notarized by the Brazilian consulate and translated into Portuguese by a sworn translator in Brazil, and the original agreement to arbitrate or a certified copy thereof duly translated into Portuguese by a sworn translator.

17. Enforceability of Foreign Awards in Brazil • The standards regarding the enforcement of a foreign arbitration award in Brazil are consistent with article V of the New York Convention. According to the Brazilian Arbitration Act, the enforcement of a foreign arbitration award can be denied only if: • the parties to the arbitration agreement lack capacity; • the arbitration agreement is invalid under the law to which the parties agreed or the law of the place where the award was rendered; • the award exceeds the limits of the arbitration agreement; • the commencement of the arbitration proceeding was not in accordance with the arbitration agreement;

18. Enforceability of Foreign Awards in Brazil • the respondent was not given proper notice of the appointment of the arbitrator or of the arbitration proceeding or was otherwise unable to present his or her case and was unable to exercise his or her right of defense; • the arbitration award is not yet binding on the parties or has been annulled or suspended by a court of the place of arbitration; • the object of the dispute is not susceptible to arbitration as a matter of Brazilian law; • or the award violates Brazilian public policy.

19. Commitment of Brazil towards Arbitration • One of the most objective ways to assess the commitment of the Brazilian legal community towards arbitration is to analyze how the courts are supporting arbitration clauses and also how they are enforcing arbitration awards.

20. Commitment of Brazil towards ArbitrationEnforcement of Arbitration Clauses • Several decisions from the Courts in São Paulo Rio de Janeiro, Paraná, Rio Grande do Sul and other States dismissing lawsuits due to the existence of an arbitration clause in a written agreement.

21. Commitment of Brazil towards ArbitrationHomologation of Foreign Awards, • From 2005 to 2009 – 21 cases were reviewed by the Superior Court of Justice: • 17 foreign awards were recognized; • In 4 cases homologation was denied due to following reasons: • 2 cases - lack of a written arbitral agreement (2 cases) • 1 case - Brazilian company involved in the case had not been properly summoned; • 1 case – Party who requested homologation was not involved in the arbitration.